Fogg deodorant maker Vini may raise Rs. 900 crore

India-focused investment fund WestBridge Capital is in advanced talks with Vini Cosmetics, the maker of Fogg deodorant, to pump in Rs 900 crore, valuing the Ahmedabad-based company at about Rs 4,000 crore, according to three people familiar with the matter. If completed, it will emerge as one of the largest investment deals in the domestic consumer goods market, which has been unable to attract big cheques from investors in recent years. The transaction is currently in the due diligence stage and is likely to provide an exit to Vini’s early investors with the rest of the capital coming into the company, these sources told TOI.

The interest in Vini, which gained prominence after dethroning HUL’s Axe deodorant as the market leader a few years back, signals the bullishness among growth-stage investors like WestBridge to back consumer brands which are targeting under-penetrated segments and can potentially cater to masses.

WestBridge Capital, the largely public market-centered fund that manages around $2 billion in assets, has been shifting gears and moving into the private market space over the past year. An investor in companies like diagnostics chain Dr Lal Pathlabs, electrical equipment manufacturer Havells and tile maker Kajaria Ceramics, among others, the asset manager has concentrated its bets on the consumption-led theme in the country.

“Vini has also held discussions with a few other private equity investors such as Multiples Private Equity and TPG Capital over the past few months,” a source privy to the matter said. Some of the larger investment deals in consumer-facing sectors recently have come in retail like Multiples Private Equity betting $110 million on Arvind Lifestyle Brands and TA Associates buying a $140-million stake in womenswear brand W.

Last year, the six-year-old Vini, which has been profitable for the past two years, had explored a complete sale. However, those talks fell through because of differences on valuation. With the latest round of funding, Vini would stall plans for sale or going public for the time being, sources explained. Vini’s Darshan Patel and WestBridge Capital MD Sandeep Singhal did not offer a comment on the story.

For the FMCG company, Fogg as a brand contributes more than 80% of the Rs 700-crore revenue, one of the reasons the company is looking to diversify into segments like skincare and haircare with its other brands like White Tone, Glam Up and 18+ in other segments.

“Vini Cosmetics has been in discussions to raise Rs 300-400 crore in fresh capital to fuel growth in categories such as haircare and skincare. But now the size of the deal is likely to be bigger as a few early investors like analyst-turned-asset manager Nikhil Vora and Bay Capital are looking to cash out,” a person privy to the deal talks said on the condition of anonymity.

Silicon Valley investor Sequoia Capital, the other early investor in Vini, though is not selling any shares in the funding round, another person said. Sequoia, which was an investor in Paras Pharma, first put capital in Vini in 2013 in a Rs 100-crore deal.

Patel is among the three brothers who built and sold Paras Pharma — with a portfolio of brands like Moov, Krack and ItchGuard — to Reckitt Benckiser for around $726 million in 2010. He is considered to be one of the best marketing minds in the Indian consumer goods industry. The 54-year-old’s native insights have helped in faster ramp-up of brands in cluttered markets as witnessed in Paras and then with Fogg in the recent years.